onthank you for joining us "france 24." we start with his headlines. at least 41 dead and over 200 inured in a terror attack turkey. suicide bomber's detonated explosives inside an istanbul international airport. authorities expect islamic state. scotland is determined to stay in the european union. nicola sturgeon delivered an unequivocal message in brussels. britain's chair at the eu table
will be at -- 27 european heads of state without david cameron. the prime minister faces questions back in london. we will go to that in just a moment. britain's outgoing prime minister, david cameron, is expected in the house of commons any moment for his weekly address and question-and-answer session with mp's it could be particularly heated. david cameron is speaking right now. cameron: working with turkish authorities to establish the full -- i spoke this morning to offer assistance. details are still emerging, but we stand as one in our defiance against these barbaric act.
marks ther, this week centenary for the battle of saul -- the battle of -- i will have a memorial new the battlefield, and it is right that the whole country pauses to remember the sacrifices of all those who fought and lost her lives in that conflict. i had meetings with ministerial colleagues and others come and it edition to my duties in this house, i will have further such meetings today. >> a-lister carmichael? and he has served this country, but he has not done it alone, and i think it is right that we should acknowledge the families. attendhe goes, will he toto one matter that when he was in opposition he described as
doing in arms damage to the model of the country, and that is the involvement of our security services and rendition. sir mark allen will not be prosecuted for what he did. will he reinstitute, reconstitute the gibson inquiry on what was done in our name and on whose authority? prime minister cameron: can i think the gentleman for his generous remarks? i am glad to be the first prime made sure i fully looked into his constituency. he raises an important point about the libya rendition issue. the government cooperated with the police investigation into these cases. there was insufficient evidence to prosecute. i would say i think there are very few countries in the world that would have had such an independent and thorough
investigation into an issue like this. , asink the right approach sir peter gibson finished the report, was the agreement to look at these issues and raise this report. i think they should continue to do so. >> thank you, mr. speaker. as my friend has said, and perhaps put into persrspective t 7:30 this friday, we will start the process of creating the 100th anniversary of the battle of the salt. there has been so much to ensure that our young people will learn to remembers of the and salute and remember those who created the ultimate sacrifice. >> i commemorate my honorable , and i think it is
thereant not only because were 57,000 people wounded or killed on the first day of this battle, but also because so many people are learning about their own families "involvement. the importance of keeping security and peace and stability on our continent was actually noticeable at last night's european union dinner. the french president noticed the commemorations and how proud he was that we would be standing together and remembering those sacrifices all those years ago. >> jeremy corbyn. mr. corbyn: thank you, mr. speaker. join the prime minister in remembering the people who died at the istanbul airport. i would also like to thank him for referring to the memorial on frididay and i look forward to
being with him there at a memorial service. i think it would also be appropriate if we pay tribute to lord patrick mayhew, who died last week. he was the driving force behind the downing street declaration in 1993 that did lead to the first cease-fire, and i think the relative peace we have now in northern ireland is in part thanks to him and for his successor. mr. speaker, what people in the country are worried about is the extra insecurity to their living standards, jobs, wages, and pensions, following the eu referendum. in recent days we have heard on -- uncertain words from companies like siemens. what meetings will the chancellor have with companies to try to stabilize the situation? p.m. cameron: first of all, he is absolutely right to mention patrick mayhew.
he did play a huge role in the peace process and was a brilliant attorney general. a belief in public service and the national interest and was a kind and goodly man, and i was very sad to hear of his passing. i sent a message to him by his wife shortly before he died, and i know there are many people in this house who want to send good wishes to his family. what conversations we are happening with business and challenges wehe face, we are in a strong position to meet the challenges we because we have paid down so much of our deficit. consequenceso -- will be difficult. there are going to be some very choppy waters ahead, and i do not resolve many of the mornings i made during the referendum campaign. we have to find the best way through this. we must talk with businesses and reassure them about the stability there is today and the
strength of the british economy. the business secretary has met with a range of businesses already. tomorrow i have been meeting with my business advisory group, and i am inviting other companies to that, including siemens, who play a huge role in the british economy. what we need to talk about is the reassurances about stability we can give now. the fact that our circumstances do not change until we leave the european union, and that i want to hear from them as we draw up the possible blueprints for britain's future, the position with europe, about what they think would be the right answer. >> jeremy corbyn. mr. corbyn: the credit rage -- the credit agencies have cut us down from aaa. of thisthe cost downgrading terms of borrowing costs and the risks? mr. corbyn: -- p.m. cameron: the leading opposition is actually right. the credit rating has been taken
down by the agency by one point and we have been put on watch. the cost to the exchequer and the taxpayer will depend on what happened to the interest rates in the market, at which britain can borrow. he is right to draw attention to that. draghi, theario head of the ecb, confirms this last night. all of the warnings were that if we voted to leave the eu, there would be difficulties in terms of our own economy and growth and instability in markets. we are seeing those things. we are well prepared for them in terms of the reaction of the bank of england and the treasury, there is no doubt in my mind these are going to be difficult economic times. what we must do is make sure we maintain our strong economy so we can cope with them, but we should not be little those challenges. they are going to be difficult. >> jeremy corbyn. mr. corbyn: thank you, mr. speaker.
everyone across this house should be concerned that businesses -- should the -- will the prime minister consider that the fiscal rule which is in effect preventing investment from taking place? p.m. cameron: i do not agree that would be the right approach. what business needs to hear, what consumers and investors and people concerned about our economy ought to hear is that we are taking huge steps over the last six years to get the budget deficit down, to make the more ---- the deficit they want those things to continue, and of course if we do see economic difficulties, one of the ways we have to react is to make sure that our public finances remain strong. we need to get the deficit down in order to see us get onto a more difficult path. i do not thinknk it would be rit to suspend fiscal rules.
there are three phases to this. the first is the volatility we have seen, which the bank of england must cope with. the second is the uncertainty about britain's future status, which we need to bring to an end as fast as possible, and my successor choosing which one we should go for. the means to bear in mind that the long-term damage to the british economy is based on how good our trading relationship would be with the european union . for my part, i think we are the theest possible -- we want closest possible relationship in terms of trading with the european union. that is something that can be discussed in this house as well as by the next government. >> jeremy corbyn? mr. corbyn: sadly this week there has been more evidence that racist incidents are increasing. in the last three or four days .lone, attacks and abuse can i ask the prime minister what monitoring systems he and the home secretary have put in
place, what reports he has received from the police, and what extra resources are being put into the community, targeting the vile racist attacks taking place? p.m. cameron: i agree that these attacks are appalling and they need to stop, and it is right that everyone in this house and on all sides utterly condemn them. that is not what we do in britain. i reassured prime minister's of romania andch as poland and the czech republic -- we monitor these attacks and the home secretary gets regular reports. we will be publishing a new action plan on tackling hate crime shortly to step up our response. we want new steps to boost reporting of hate crime and supporting victims, new cps guidance to prosecutors on racially aggregated crime, a new fund for protective security measures, and potentially vulnerable institutions, and additional funding to community organizations so they can tackle hate crime. whatever we can do, we will do
to drive these appalling hate crimes out of our country. >> jeremy corbyn. mr. corbyn: thank you for that answer. the status quo is clearly not delivering per there are 13.5 million people living in poverty theritain, up 300,000 in last year. 4.5 million people in england and wales alone are in insecure work, and two thirds of children in poverty are living in households where at least one adult is in work. the prime minister has two months left. will he lead a one nation legacy, and will that one nation thecy be the scrapping of tax, the banning of contracts, and canceling of the cuts to universal credit? where would i agree with the gentleman is of course we need to do more to tackle policy, we need to do more to spread wealth and opportunity. but to try and pretend that last
thursday's vote was the result of the state of the british economy is complete nonsense. the british economy is incomparably stronger than it was six years ago. we all have to reflect on our role in the referendum campaign. i know the honorable gentleman says -- i would hate to see him when he is not trying. >> jeremy corbyn. mr. corbyn: mr. speaker, government figures released yesterday show the number of children living in poverty has to ad by 200,000 in a year total now, a disgraceful total, of 3.9 million children in this country living in poverty. does he not think he should at the very least apologize to them and the parents that have been failed by his government and do something about it so that we reduce the levels of child poverty in this country? do. cameron: if he wants to
with the figures, let me give them to him. income and inequality has gone down. he asks about poverty. there are 300,000 fewer people in relative poverty since 2010, half a million fewer people -- >> you are listening to the outgoing british prime minister, david cameron, during his weekly session of question time, back and forth between his self -- between himself and lawmakers. you listened to a back-and-forth between him and jeremy corbyn. doug, we are scrutinizing this for any mention of the european union to try and get their assessment both from the opposition and from of course david cameron himself, as to what they think of the results of the referendum, and especially on david cameron and what he thought of yesterday. >> he had to explain that he had
gambled with their future and the future of the u.k. >> in british parliamentary democracy, all prime minister's questions are interesting. all prime minister's questions posed rex it are especially interesting, apologies to tolstoy for the misquote. areto be glib here, these extraordinary times and it is hard to understate it. these are extraordinary questions right now, and you have been coming in this almost surrealist atmosphere, where a political landscape has literally been convulsed, upended in britain. you have both leaders basically right now on the back foot. a lot has been said about the labour party right now in a state of utter dissolution. -- did notorbyn said sound like he was going to lose rid >> he still believes he is going to -- he still believes he
has the grassroots support, so he is not yielding to the party bigwigs who are resoundingly demanding that he step down in the interest of the party. but let's not understate the pickle, as the brits might say, that david cameron himself is in. this is the outgoing prime minister, ve significant here. david cameron is under enormous pressure, especially from europe, to trigger that article, article 50, which would basically start the clock ticking on the two years of divorce talks, on the manner and neck and is him -- on the manner and mechanism that britain will leave eu. his party is tremendously divided. while everyone is trying -- it is split right down the middle right now. interestingly, as we know with the actual parliamentary chamber in britain, was a majority of them not really mirroring or reflecting the country's
consensus for remain. the party is very much divided on this issue. right now a fierce battle is going on for the leadership contest to succeed david cameron . the initial date of the new leader to be decided has been pushed back. it was pushed that yesterday and i believe september 9 was the earliest day. it was going to be september. it raises more questions of how long this landscape and this sort of witching period of absolute uncertainty is going to linger in britain. both the leaders are under pressure, but in the prime minister's question time, the debate -- the date implies the prime minister is taking the heat as he was facing the questions. right out of the starting block, thehad the anniversary of battle of the psalm -- it is obviously going to be a major,
major theme around which the country can unite in these very divided times. you had tributes to a former northern irish politician. but what is interesting, you had the leader of the opposition, still the leader of the opposition, jeremy corbyn, being called upon by the speaker, coming out of the starting blocks, getting off the back bench and shooting at him, at david cameron, the vital questions that everyone, not just in britain but in europe and across the atlantic and the u.s. and rippling across, asking himself what economic impacts, what political impact this will have, namely businesses. we heard a lot of businesses, talk of the economy. >> it felt like giving cameron was defending his record. >> he specifically said there is the implication in jeremy corbyn's question, that somehow the state of the economy in britain was somehow what motivated the brexit vote. david cameron firing back,
because david cameron has maintained all along that he is leaving britain in a relatively upbeat, buoyant economy from what he inherited, an economy that will be able to meet these challenges and this crisis. he was trying to separate those issues, saying to jeremy corbyn do not say this had anything to do with the british economy over which i presided, because i presided over the recovery of the british economy. the britons who voted stated that they were voting to leave over disenfranchisement, a ,acklash over the elites concerns over globalization and other concerns. big companies thinking of leaving, vodafone perhaps, and siemens, and also poverty. is that separate from the brexit? is it tied into the brexit vote? they were continuing to iterate that as we came out. >> thank you very much, douglas
herbert. turkey is in mourning after last night plus terrorist attack that killed at least 41 people and injured 239. at least 10 foreigners were among those killed when assailants are themselves up at istanbul's ataturk airport. the islamic state is behind the attack. >> security camera footage shows a moment the blast rips through arrival hall at istanbul's ataturk airport. threesuicide boom -- suicide bombers killed and wounded many inside. >> we saw the bomb in the x-ray explode. everyone around it died in the blast. and looked through the window to see the shooting. >> one guy had a hole in his
back from the shrapnel. as emergency workers swooped down to help the wounded, amateur footage shows travelers inside taking shelter however they can. police are thought to have reacted fast, firing on the attackers before they reached the security checkpoint in the arrival hall. e bombers are said to have detonating before their explosive devices. turkey's prime minister has blamed islamic state for the attack. our security forces investigation indicate that the terror attack was carried out by daesch. i can see that there are security officials -- ataturk's church k's largest import -- largest -- is turkey's
largest airport. air traffic resumes wednesday morning. move to business news. stephen carroll joins us for that. we were just listening to the prime minister's question time, the outgoing prime minister, david cameron, and some of the questions he was asked were about the concerns expressed by businesses currently operating in the u.k. he was asked whether he would be able to reassure them. you have more on this. you are telling us about vodafone, which has expressed concerns. stephen: and they are not the only company that has vodafone biggest company listed on the ftse stock exchange in london, and it says it cannot make any long-term decisions about the location of its headquarters, which is currently in london. become he said the free movement of people, capital, and goods provided by the european union was critical. the majority of its profits come from elsewhere in the you, this
coming as -- in the eu. >> the u.k. is still a member of the european union and still in member of the single market. employment is still at a record high, and this government is still 100% committed to making the u.k. the best place in europe to start and to grow a business. none of this changed on friday morning. none of this changed overnight. for hastyt the time decisions that will be regretted later. following the results of thursday's referendum, the u.k. voted to leave the european union. we have been scrutinizing results in the markets. yesterday was a bit of an upswing. what is the latest today? see enormousid falls between friday and monday, but the gains at least will be
in good terms today. frankfurt andand london up. thanks are leading gains in many places. barclays was up by 3%. paribas. bnp the parity markets, expected to hold onto gains from yesterday. low of off the 31-year 1.31 that we saw it hitting on monday. there could be more falls ahead. the effects of brexit could be worse than the last time earnings crashed in 1992 on black wednesday. >> this is worse than black wednesday because there is a lot more market participants and investments now, and it has become much more egg of a global market than when we had black
wednesday. at the end of the day, you will probably see a continued rise in sterling, and we are looking at others to at least 1.30. >> businesses in the host cities for euro 2016 gains are taking stock of a busy few weeks. stephen: there has been a huge influx in places like lyon, bordeaux. you have thousands of new customers to cater for. the northern city completed its hosting duties and business owners there are counting up there profits. -- counting up the profits. >> euro 2016 is over. now it is time to take stock. cafes poured thousands of liters of beer. we will manage without having to take on a lot of -- it is practical. like with all big parties, it
when i was eight or nine years old that was like 1960. no one had been to the backside of the moon at that point. in the story, these astronauts are going to go to the backside of the moon and figure out what is on the backside of the moon. everyone has always wondered. we have only seen the front side. and theyin the capsule sign off, radio silence, it is going to break the radio waves. they are going to turn off the vacuum tubes and save the leg the city. 1960 toss. -- save the electricity, 1960's. they look out the window and there is this cast. a debate breaks out. shall we tell them? would see. what they a crashed spaceship? a lost civilization?
lizard people? what is on the backside of the moon? they were so horrified by what they saw that it almost turns into a fist fight in the capsule. eventually they come to the conclusion that they were just going to say it looks just like the front. we are not going to tell anybody. because the backside of the mood was made out of the two by fours that they made roller coasters of and it held up a canvas for lock that held up the front start. -- front side. a hollowed-out thing. i think it is a perfect metaphor for our economy. we have been through this before.
we have teetered out what our economy is like and what to do. we have figured out the solution. to call up the swedish economist and ask, how do we fix this? there is an economic part to it also aou but there is philosophical part. why would someone put into place economic policies that essentially haven't destroyed the american -- have destroyed the american middle class. we are still in the middle of the crash of the 2008. it never resolved. bubble gum and bailing wire. they held off for rational political partisan purposes. the obama administration is doing the same thing, trying to hold off until november 2016.
the difference is he has got the entire republican party trying to bring it down around his years. hold it not able to off. it still blew up. -- stock market hit 16,000 80% of the stocks are on the top 20%.%. that is the wealth of the wealth. we are not looking at the economy. they say the economy is great. all these houses. -- a veryge of those large percentage of those houses have lost money. people rents cars. the equity has been taken out. mess of this 00
physicalness of this, -- my fatherdream went to japan as part of the occupation. back on the g.i. bill, he went to college. he wanted to be a history professor. be a phd. he and my mom met and fell in love and got married in 13 months later i came along. mom had d already graduated. he hadad not.. he got a good job. he ran the office, knew the machines. a sinking company. because he had a good union jobs
he was able to buy a house. note. a three percent guaranteed by the federal government. was he went to college she paid to go to college. it was free. he had the house paid off at the end of 20 years. in 2006.re he died he had attention which not only survived him but hate for my mom, and to. -- but paid for my mom, too. occasion. he bought a new car every three years and turn the old one in. this was the american dream. he had it all. the basement with 20,000 books, most of which he had read. we did not live high on the hog, the house he bought was a
three-bedroom one baththroom hoe that he bought in 1956 and there was me in three brothers but it was fine to us. -- he died that was the american dream. lottery dream came along. now the dream is to be the next guy who invents facebook. you cannot build an economy on a few billionaires. it does not work. pointed out -- does anyone have a copy of my own that i may borrow? thank you. and thisnted out -- was not unique -- i remember this from the 1960's. we went and bought magazines and finally found the article.
it pointed out that from the george washington administration to the ronald reagan as productivity increase, and that is the amount of stuff increase per unit of labor, as part of vivid productivityas increased from the cotton gin to industry, wages went up along with it. those two lines. it starts in 1947. they tracked each other. thatrkers do came more of turned into higher wages or lower working hours. 40 hour work week now. 70 hour work week at the civil
war. in addition to lower numbers of hours worked, people made more money. that continued. continue.ty our businesses continue to make things. wages have been flat since 1980. this cap has opened up. has opened up. corporate revenues go up. there is a lot more money. that has not been going to the middle class. wages have in flat all this time. in therage wage earner .960's was $20,000 people like to quote household income, which i think is to set it. household income is $43,000 per year. if there is a reason why.
-- but there is a reason why. that is because there are more than onepeople -- more person working in the household or more than one person working more than one job. 1970's throughout the t to work.m wen two people started working, raising a family. that was not enough. to maintainsaid, our standard of living, let's tap out our house. my brother sold his. let's tap into that equity.
they took equity out of their homes. then credit cards. 1970's x, i was running a business. and i were running a business. that year i make more money than my dad and my dad was real proud of me. i was 25 years old. i finally qualified for an amererican expressss card. i had never been able to g get a credit c card. you could not get a credit card unless they knew you were solid. you had to pay it off every month. if you were one day late they would take it away from you and it took a year before you could apply again. no-nonsense. the average credit card debt in the united states runs from $9,000 per person up to $20,000 per household. it has exploded.
getst who died last week credit card applications. then it was like, ok, what are we going to do now? we have wiped out the credit cards. we have rented a car. .et's put the kids into debt i went to college. i did not graduate. michigan state. over an anti-war riot, which is a hole on -- whol e other story. lived inre in 1968 and the park. a whole other story. i paidwent to college, my way through college by working a weekend job as a dj. absolute minimum wage. as a worked at a big boy cook and a dishwasher. and when the waitresses went on
strike i was a waiter, and ever since then i have been an in scene tepper -- an obscene tipper. i worked at a gas station. you cannot do that anymore. when i went to college, 80% of colleges were paid foror by stae governments. abe lincoln came up with this idea. you give them a chunk of land so that the college can work that land so that the students could go to college for free. abe lincoln was not the first to come up with this idea of freeee college. thomas jefferson created the university of virginia which was the first free college and he was so proud of that that on his tombststone it s says founder oe university of regina -- of virginia. those were the things he was real proud of.
that was his legacy. free college. byby the time i got there, 80% s paid for. tuition was a couple of hundred dollars her term. it was not a whole lot. now it is upside down. collegesf the cost of paid for by tuition and 20% by the state and federal and local government and the college of self. -- college itself. looking not at what , described to you, this gap wrotes 1966 that "time" this article. productivity had followed the wages. they said it is going up. robots.
computers. what are we going to do? what is it going to meet? what is the year 2000 going to be like? they concluded that if wages totinue to follow to the -- " everyoneuctivity, in the u.s. will be independently wealthy." "even nonworking families will have an annual income of 40 houston dollars." $40,000. how to use leisure meaningfully will be our problem." that would be $200,000 in today's money. how did this happen? what is the philosophical story behind this? with the familiar
conservative worldview. my father was conservative and republican until the day he died. when i was 13 i went door to door for eric goldwater. two years later i was getting tear gassed that msu -- at mus. -- msu. understood russell kirk. he wrote a book called "the conservative mind." ,n animated william f buckley barry goldwater. it is the idol of the modern conservative. it is still in print. still wildly -- widely read. intelligentsia will speak of this book.
it was not a villainous philosophy. shouldat how society the. the conservative and the liberal way. johnattle goes back to adams and thomas jefferson. they started whenever he came through town. it haso it the way always been done. jefferson said we need a revolution every 20 years. he saw changes a good ring. two fundamental worldviews.
thomas payne eventually supported the american revolution. he spent two weeks at his house. he got into this too-weeklong battle. wrote an entire book, "the rights of man," as a rebuttal. here is the modern english version. a ruling class and everybody else. manays it does no harm if a is servile as a candle maker. he iss violence if allowed to participate in the government. way, is the same kind of thinking that has animated laws across the united states.
suppress the vote. john adams wanted to use that with people of lower means. we do not want the rabble participating. kirk basically predicted the american middle class was growing. it is something the world had never seen before. if he keeps going like this and this happens for another couple of decades, you are going to see people who are going to have this leisure time and they are going to cause trouble. this is the rabble. ,o back to thomas hobbes without the iron fist of church or state life would the nasty, brutish, and short.
being the first of modern-day conservative philosophy spurs. -- philosophers. kirt predicted there would be got if the middle classs too big. so let's slow down the pace of stuff. he understands the arc of history. wrong with that. legitimate worldview. his book had been out for a couple of decades. a soft-spoken lawyer , i spokesented tobacco with him, read about him, watching videotapes about him,
and have come to the conclusion that he was actually a good and decent man of good heart and thought he was doing the best for his country. there was no villainy in this. in 1971 it looked like russell kirk's production was coming true. young people were having sex like no tomorrow. women were demanding the right to participate in the work place. young people were smoking dope and taking lsd and saying i am not going to the war and -- you had thens civil rights movement.
cities that were burning. gay people saying, what what about us? in 1979. happened it was as if every sector of society had just interrupted. -- erupted. everywhere these guys looked, what they saw was chaos. they genuinely believe they .hought this was not good chaos this is the kind of thing that leads to bolshevik revolution and brings down government and destroys society. people were not going to church. the force. women were openly talking about war since. -- about abortions. people know that they were simply abortions. there are was a lot of discussion about this kind of thing.
all these things that happened, challenges to the established order. that societyt shouldld move slowly and gradually. this was a horror show. was that in part 1965, 1966, rachel carson wrote "silent spring." inticides not only killing out-- insects but thinnining and shall so that the birds were not hatching. the planes are spraying ddt over our house. wether or not ddt is toxic, and there is some indication it is toxic, it is definitely toxic to birds and bees in one day we are going to wake up and the spring
is going to be silent and that is the beginning of the death of the earth. you had the whole industry under intact from an environmental movement. and that, did yoyou seriously fix ande the gas tank decided not to do it because only one out of 10 people would sue? cheaper not to put the bolt in? this is the stuff that was being exposed. the corporate lawyer and the social conservative look atat ts and said, we are under siege. we have got to get control of public opinion. we need to create ink tank's that will put this out.
instead of rachel carson on the it's one offe," our guys. broccoli, came the heritage foundation, the coke the american enterprise institute. we have got to take control of state legislatures. they vote on model legislation that gets induced -- introduced. we have got to get control of colleges. hotbeds of marxism. but given what is going on on campus. we have got to do something about this. corporationsarge funding chairs where only conservatives are allowed to be
hired to teach. we have got to take control of government itself. we have got to take control of the courts. federalist society. more than half of our judges are federalist society, very tense vervet of. -- very conservative. take control of the media. , went to richard nixon and said every day we come up with talkingng points for republicans and we send them out on airplanes to tv stations all over the nation on tapes. before the internet. we will call it "goptv." all these notes on the margins. nixon said we cannot afford to do that.
good luck. find a billionaire and do-it-yourself. is the chairman of fox news. let's stabilize business, society. from my dad's perspective, reasonable. what these things did was they open this to the predators. the people that game the system and take advantage of the system -- let me explain about commodities. this is not the big thing that caused the crash, but more responsible than anything else. all own theat you bakery. midwest.ed out in the it is the beginning of the
growing season. is goingr, the wheat to be expensive. you want stability. good price of bread. i take half my crop and put it on the futures market. wheat is a commodity. i will sell this in advance. we can budget for a year. we are guaranteed to buy that wheat. if it is higher we win. if it is lower, we lose. it does not matter. stable business. these are called commodities futures. all about stability. weather it is we, poor alleys for the bacon industry -- pork itly for bacon, whatever may be. the people who are selling or
buying are called counterparties . this is how the commodities market works. it was regulated by federal agents see the commodities futures trading agents the in washington, d.c. regulated through the exchange on which commodities are traded at a chicago, the chicago board of exchange. there was this guy called ken lay who wanted to get a couple of things done. he had a problem with the banks. 800 companies. he was running a ponzi scheme. put all of this profit in another company and took nine paychecks out of the profitable companies. the bankers started to figure out what was going on. banks, savings banks,
mortgage banks, were not allowed to trade in stocks. stock brokerages, investment banks were not allowed to i issue a c checkboo. ken lay was very concerned that banks would figure out his scam. he wanted to get into the commodities trading business. energy, whicht was not something that could be traded on the commodity market -- you can drive down the street and see acorn silo. electricity? it does not fluctuate wildly from year to year in ways that would justify being traded as a commodity. he had figured out a way to make money at this. he started lobbying the federal agency. wendy gramm was the head at the time. the wife of the senator from texas. he lobbied this agency to allow
energy to be regulated. , that6, wendy gramm said is cool. we will eight you do that. that is not an off. then she left her job with the federal government and went to a well-paid job as a member of the board of directors of enron. that was not enough for can. he also wanted to be able to have his own bank said he could hide what he was doing. he wanted his own bank so that he could gamble. down auld require taking lot that was set up in 1935 to prevent banking crashes. the united states has never gone more than 15 years without a major nationwide tank can it. -- bank panic. they separated these types of banks. -- gamblingnks banks went down all the time, but in commercial banks, your checkbook with dave -- was safe.
when the c caution husband -- wendy's husband introduced legislation that did what he wanted. -- blew up will out the law. anyone can own a bank. we will change how banks are regulated. commercial banks and investment banks can merge. ken was excited. secondly, he pushed through a bill called the commodities futures modernization act. we can take futures, commodity we have been wheat talking about and they do not have to be physical things. it can be other things. insuranceen trade in on things as if they were commodities. he started doing this with energy to stop then enron blew
up because of this. the banks got this and they started doing it with mortgages. mortgages is cool, because you cannot drive down the street and see mortgages. you cannot say that a house is underwater or has a loan. you couldn't see that. they push together these clumps of commodities, mortgages. they called commodities. then they went to aig and said, we want to buy insurance. we do not want this to go bad. else, and it is literally a bunch of guys in say, you, they would have $1 million worth of mortgages and a $10 million insurance policy. we will buy $100 million. $100 million in
the fact that the policy may go bad stop someone else goes along and that's. someone else comes along. they say that that $10 billion policy will not go bad. each one of these, because they have this underlying value, from which they derive their distance, these are called derivatives. here are the numbers. the gross domestic product in , it is roughlyes $15 trillion. the gross domestic product of the entire plan is roughly 65 million -- exceed $5 trillion. before they made these changes, there was virtually no serious trading of derivatives. this was a brand-new word for all of us. 2008, according to a bank of
international settlements, in 2008, the amount of money in ,erivatives that these banks this is what they were writing. trillion dollars. gdp of the planet is $65 trillion of stop if you look at a number like that, you go that something fishy is going on. when the crash happened, it gogt back up. it is back up now. we have got to do something. we have to unwind. we have to roll back the reagan revolution. make if ioint i would mentioned in 1976, the year that i got my first american express card and make more than my dad, the next year, our cpa said, you
guys are taking too much hay out of this company. we were competing with a guy who eventually ate our lunch. we were doing pretty good.d. he said,d, you guys arare takino much money. i just bought a brand-new volvo. i was having a great time. client he said, you will be paying 50% in income tax. he said it is crazy. whenid, take your money you sell your business. take it as capital gains stop put it back in the company and buy some new advertising. do some research and design. do with american business does. why thethe reason average ceo pay was three times average worker pay. wasake more than 30 times crazy. you would have a 74% income tax.
reagan dropped down to 28% of stop the money comes flooding out. it is the same thing that happened in 1921. there will privatize things. there was less government regulation. the first thing he did was he rocked the top tax rate. all the money flooded in. it created a wild speculative double. they both burst. we were off to the races. we are repeating the exact same mistake. stoped to undo that will with that, i will wrap this up. i will take some questions and answers. thank you for showing up. [applause] >> let go right to it. if this crash happens, how serious will be social
disruption be? crimes, riots, clalass warfare. what can we do to prepare for it? >> i do not agree with the gladback dystopia, get your guns. if we look at the history of crashes in the united eight, the great crash of 1929, people pulled together. in 1896, people pulled together. 1857 led to a civil war, regionally, people pulled together. in the american revolution, people pulled together. i'm strongly of the opinion that this could be a healing ring. it will be a painful thing. it already is. the great depression as a phrase was not used until the 40's. in the 1930's, they refer to it as the panic, or "current difficulties."
from now, we will look back on right now and call it be great to russian. we are still in the middle of it. it has to unwind it help. in terms of what to do, i am not an invnvestment advisor. good economist who seem to know this kind of stuff suggest that , youthese crashes happen can buy stuff for a whole lot less than it used to cost. values fall. you want to be debt freree and have as mumuch cash as possisib. some of the great fortunes in america were majoring the 1930's. they could buy up land for pennies on the dollar. i had another guy on the program say that if you cannot be debt free, bs in debt as possible. [laughter] that pushes the edge of fraud. >> there are a couple years to prepare for that.
this could happen next week. the thing is, for people who get hurt in these crashes, they are the people who have half the equity in their house. suddenly their house is underwater. try to get outut of that positi. >> you say the future is optimistic, but there is a slow worsening of thing since reagan stop wide you think we will follow the enlightenment, and not fascism? >> to answer the second part of 1933, ition first, in hit the world all the same. we had fdr. that is why it matters who is in the white house. it matters who is involved in politics. it matters that you get up there and be politically active stop
humans show up. you must show up in party politics. when fdr came into office, you would that he'd paid the huge occupied movement. world war i soldiers had a coupon in 1940 four a bonus for their service. they were broke. he had an army all the way down to the potomac river. tens of thousands of people. it was a huge movement. it happens all over the country. the political will was there. it was pushing him. frankly, if president obama had come into power a year later, if we have been leaving 800,000 jobs a month for a year, or two years later, like fdr. in after three years of
herbert hoover doing nothing. he would have had the political will. he would have had the people behind them. he doesn't right now. if we look at this history of ,rashes in the united eight when the last man who remembers the last great war dies, the horrors of the last great war died. the next great war becomes inevitable. those who fail to remember history are doomed to repeat it stop we are making the same mistakes. it is not just will be made in the 20's. it is what we did in the 1850's and the 1700. the good news is that every time we reboot ourselves. the 1700s, we came out as an egalitarian country stop it was the first liberal democracy in 3000 years.
we came out of the civil war with a legal antislavery. we had the 17th amendment with the direct election of senators. women being able to vote. there was positive progressive change. we came out of 1929 with the 40 hour work week. unionization. the list goes on and on. there is a lot that needs to be done. i believe that once that political will is there, that will happen. >> you have an optimistic note. you talk about the letter to your great-grandchildren. in 2090. >> you who are living 80 years from now. it does -- it takes 60 years for people to forget.t. and then it takes 20 years to make stupid mistakes. that is the cycle.
we see this over and over again. 1920's, werer the harding set up the crash of 1929. he dropped the top tax rate and deregulated banking. he outsourced government functition. he did the same things that we have been doing recently. had in the 1930's, along and 1950's come said if this works so well we do not need it anymore, that is the argument he made to congress. batman,ike to say that there would be people who had lived through that administration. they would have laughed at him. maybe robert burkett. but other than him, everyone was dead or talking with grandpa. they were not taking him seriously.
that is what happens. it takes 60 years to forget or for people to die out and then some new genius, smartest guy in the room, ken lay steps in and saysys, let you this. in my letter t to my great-grandchildren, should be have any, and we have none so far. say, here is what we went through. please learn from our mistakes. this country does not need to go through this again. we need to wake up. we are talking about leadership right now. this question from the audience that president obama and his administration have embraced the worst aspects of his corrosive trend. we see hillary clinton as the de facto front-runner.
now my speakers were. she accepted money and speakers these from goldman sachs. does that take away her moral authority? >> here's the thing. here's the thing we have to understand. it is not about people. it is not about politicians. it is about the times. it is about we, the people. the constitution makes no reference to leaders. it makes reference to representatives. we elect people to represent us. franklin roosevelt was a wealthy governor of the most corrupt the in the united states. new york in the 1920's. when he was running new york, there was corruption right under
his own notes. he did nothing about it. you could build a case that he was one of the most corrupt politicians. you think hillary clinton is bad? greg roosevelt was a mess. and he ran for president on a platform initially balanced budget incremental change, let's just keep doing what herbert hoover is doing. then he came into office and people were there. the great was there. the way it works in america is enough of us formed a parade, whether it is on these poker in the streets, if enough of us formed a parade, a politician will jump out in front, when they fly, and say, this is my parade. look at the tea party right now. >> it is not working out so well for them.
i can give you a long list of areas where it is a great president obama and hillary clinton on policy. we, the national spirit, the zeitgeist of america, changes in a big way, that is what you will continue to get. you will get the same old politicians. every 80 years, we get one of these generational -- it was franklin roosevelt. . thomas jefferson we are ready. the birth pains will be the crash. we will get through the birth pains and d what comes out of tt will be a new life. it i is a wonderful thing. i am not willing to trash hillary clinton or s say she is not good enough. i personally prefer elizabeth warren. clinton, she knows
how to take names and kick out. i can say that. if the times push her, she will do it. if the times push barack obama, he could do it. he only had 13 weeks from the time ted kennedy died where he had a filibuster proof senate. that was it for the whole, entire presidency. he had that health care legislation past. he got a lot of good stuff done. and then absolute obstruction. -- what it will take happens when a crash happens is that for the average person in america, reality rips open. it cracked open. leonard:, --
cohen, the light comes through. someone s in and says, here is the solution. we do not haveve to llll an economist from sweden.n. we know how to do this. one wonders if there's any segment of our society that will be affected stop who will be hit the hardest? >> the people who are in the process of building your equity. we have seen this. have our own recent history to look at. the people who have invested in the stock market. it is in a bubble. , there are market places where it is starting to go back into a bubble. basically it is middle america who get hurt the most. the working pooror are always huhurting stop the very rich always the great out. some of the biggest fortunes in america were made in the 1930's.
the rich and profit. they will profit. >> i have a few headlines from recent days to throw out at you. here in california, we were facing a state budget of $60 billion underwater. we just learned that this year it will be 2.4 billion. is that a sign? sign of a a crash coming? >> i do not think that relates to the crash. thatat is really good news. california is leading the way for the rest of the country. a lot of that is coming out there be change of how you redistrict. it reflects the will of the people. a few hours ago, i got a
newsletter. the new headline, and this is the guy who protected the crash last time, he is pointing out top something percent, i forget what it is, it is the same thing in united eight, it has gone from being a couple of hundred percentage points being richer do hundreds and hundreds of percent richer. wealthy couldly be the salvation of our economy will stop i can dig it out of my phone, but it would take a few minutes. these kinds of conversations are starting to be had. solid-statek to a for r the econonomy. >> i have immediate question. there were a couple media questions. audience, one of the few progressive p point. why is that?
a question from the audience, to what degree is our 24 hour news media helping or hindering our expectations? >> one of the things that reagan did that was most pernicious and that needs to be rolled back 1982 he stopped enforcing the sherman antitrust act. the last guy who did that was jimmy carter who broke up at&t. richard nixon started that process. when reagan came into office in 1980, and some of you may be old enough to remember this, they used to drive across america. every town was different. every downtown was locally owned. every shopping center was locally owned. now you can drop out of a plane from 100,000 feet and land anywhere. you would have no idea where you are. it is all macy's and mcdonald's and whenever. the same thing happened in the
media. this incredible consolidation started happening. the consolidation is being run by corporations who are not real fond of the e methods that i hae been sharing. on the other hand, there is an audience for stop they like making money. they will sell you the rope that you hang with. i should not say that. hand, we haveher seen some changes. when the big radio networks. state.a big swing there were four major stations. it is the same thing in florida. we were pulling incredible numbers. they replaced us with a sports station. it never made the e kind of mony we made. you have to look at those decisions and say, are these i do not wantens?
to get into a huge conspiracy. on this, but the fact is, rupert yearch lost $100 million a for five years. secondly, if you look at these conservative institutions as shelley a olson -- sheldon adelson referred to himself, when they put money into politicians, they are getting a return. they are getting lower taxes. they are getting less regulation. they are getting lower wages for their workers. george soros gives money to liberals, and he is jacking up his own taxes. it just makes sense that you would have a whole lot more conservatives running everything from the media and what not to philanthropy.
traditionally, we have seen in these cycles, there is a conservative overreach. harding, coolidge, and hoover were classic examples. franklin roosevelt had to deal with william randolph spurs. -- hearst. when enough people wake up, and it is typically caused by a crash, then progressive change will happen. they can out shout the voices of greaeat wealth and power. a 13morgan agreed to sell -- agreed to a $13 billion settlement. put that in perspective for us. that seems like a lot of money. practices in connection with -- it is not a lot of money. jpmorgan has $20 billion just thing in a on, waiting for this kind of thing.
they will be able to deduct a lot of this in their taxes. all you have to do is look at their stock price. this was announced and their stock price went up, not down stop that should tell you. every now and then, i waxed like about ronald reagan. in 1983, he deregulated these evenings and loan industry -- savings-and-loans industry. three years later they crashed. reagan investigated over 1000 people, put 600 of them in prison. john mccain almost went down. rating put these guys in jail. l nationalized the s and industry. he told the stockholders that they have lost everything. ownsederal government these snl -- s and l's.
he was on my show a couple times and he died recently. he put him in charge of the thing and said, you have 20 years to unwind this and re-privatize it. this is what sweden did in 1997. they nationalized their banks. this is we should have done in 2008. >> someone asked, what could be done to get workers to join a union? interesting well about co-ops. >> more people work for worker owned co-ops and unions. it is astounding. there are some states that make to form aeasy worker-owned co-op. other states make it difficult. we need to push for it to be easy. wherever democracy is in the workplace, the workers are owning the work days or they are
members of a union. egos i, a couple of harry truman, but it got passed by a republican congress. it has allowed these days to do their thing. frankly we need to reverse that. >> we have time for one more question. someone asked, will the obamamacare history of low overn time for the 2016 elections? >> there is an interesting article in the new york times about how the republican party has changed their messaging on this. they are asking members to push out to all of their mailing list , do you have obamacare horror stories? they are making this a very concerted effort. they know. they have experienced medicare and a redacted it would be a disaster.
they saw this as social security. they predicted that would be a disaster. at least they did not try to sabotage it. once people get benefits like this -- >> we are the only country in the industrialized world that does not do this. >> and we're working on in a half-baked way. they know that this will be very successful and that success will help president obabama and the democrats. they are trying to kill it. i do not think they will be successful. i think the american people are smarter than that will not -- then that. i just started talking about this on radio and tv. you talk about states like louisiana with bobby jindal and they say they will not take this hundreds of billions of dollars in federal funds to care for than $3000make more a year but less than like $20,000 a year. those people are screwed.